Japan and Indonesia sign free trade agreement

Japan and Indonesia has signed a bilateral trade agreement yesterday, in efforts to boost trade and investment between the two countries. The agreement will take effect immediately, but it will be implemented in stages over the years and is expect to be fully implemented only in 2016, with tariffs eliminated on more than 90% of the trade between the two countries.

Under the new trade agreement, Indonesia will reduce or eliminate tariffs of about 93% of its 11,163 tariffs, with 58% to be eliminated immediately. In turn, Japan will reduce more than 90% of its 9,275 tariffs, with 80% to be cut immediately, including those for textile and agricultural products. Japan is Indonesia’s biggest export market.

Indonesia will remove tariffs on Japanese cars and auto parts by 2016, and Japan will immediately remove tariffs on almost all industrial products from Indonesia.

What has happened to the JMEPA (Japan-Malaysia Economic Partnership Agreement) between Malaysia and Japan talked about back in mid-2005? Is it in effect now? Is it the reason why Mitsubishi has managed to price the Lancer so aggressively?

There was previously a report by AFX News that Volkswagen’s keen interest in Proton was to take advantage of the Japan-Malaysia Economic Partnership so it could use Malaysia to export to Japan. There was also a previous report about Volkswagen planning a plant in Japan. How does this affect the Volkswagen and Proton talks?

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history. An avid electronic gadget aficionado as well as big-time coffee lover, he's also the executive producer of the Driven motoring TV programme.

VW now hav another option. If the tariff for exporting cars into Japan from Indonesia is to be relax soon, i dont c why VW needs proton anymore. They can just build one in Indonesia and avoid all the political shit gov are giving them. On the other hand Proton do have that Tanjung Malim factory…. hehe. But then again VW….. IS a rich company. Building another factory might not be such a big problem for them. It will take a lil longer before they can export their car there, but there’s a feeling they are not really in a hurry.

Indonesia has the largest population in Asia, but it is not the biggest automobile market, because of the low per capita income. However, by 2016, when all Japanese cars are free from any inport duty in Indonesia, the disposable income would have increased and Japanese cars will be affordable to many.
This raises several questions to Proton and Perodua who have been eyeing the Indon market for quite some time. It looks as if they have to rethink their strategy, because besides the bilateral agreement betweeen Indon and Japan, there is also in place an agreement amongst members of ASEAN.
Interesting times ahead for the auto industry in this region.

Yes Mr. Paul. Thats the reason behind it. Now, Japanese manufacturer has 2 options, whether to use AFTA CEPT rate if assembled in ASEAN countries or use MJEPA if assembled in mainland Japan.
There is also talk to export Proton to Japan, to testwater and psychological breakthrough, Malaysian auto manufacturer can also invade Japan.

“VW will not buy into Protonâ€¦â€¦â€¦.they are using the delaying tactics to make Proton worthless and buyâ€¦..or like most said nowâ€¦â€¦..build one in Indonesia” this is probably the most illogical posting i’ve read today.

if VW is not interested in proton, do you think they will waste their time to continue talks for so many months as a “DELAYING TACTIC”? Whats the point to delay? delay what? What are you talking about??? VW can go and do anything thing they wish in any country at anytime they want… please comment intelligently la.

To me, i think our govt are too hasty in trying to sign FTA’s with Japan, and also the US. as it stands already, we are greatly disadvantaged by trade deficits with these 2 countries. If we open our markets even further, I dont see where we will benefit? anyone else has an opinion on this?

To be honest, I have a feeling that someone is just buying time for another person to clear up his mess before the white knight comes in and start asking questions. I am sure no one (not them anyway) would be so stubborn on a deal when all they have is to gain.

The G should stop playing charade (who am I kidding, change the world?) and close the deal asap.

1 word to G… They scare loss to globalization, n they know with their asset they still cannot win other country.. sample : Singapore… Even a tiny SG can win over Malaysia. Now not yet 100% open market just simple earn our people money into their pocket, easy.. But if open to the foreign, they scare their earnings will be less and being taken over by the foreign company.. Well, u know laa Proton… That why VW know that, VW also know Proton need foreign help on technology but if Proton come out too much of !@#!@$, they just simply go to Indonesia or Thailand. Just like Toyota, Honda, Ford, Mitsu now go to Thailand & Indonesia to open their factory… Why Malaysia less? Ask the G about his protective policies… Protect the people or their pocket? Think about it… If Proton & Ketuaan Melayu G are so great, why still scare of these Japanese, Europeans & Americans? Losers just admit it…

bigfish, FTA at the expense of your own local economy is stupid. its not just about buying cars, its about everything else. local business might have trouble competing if they’re flooded by cheap imports.. is that what you really want?

vw wants proton coz proton provides a government funded monopoly/protection on any car they release here. whether as a proton or a polo type cheap car. proton needs proton because they need others to do thier work for them and tag along for survival…and guaranteed profit.

at least mitsubishi learnt thier lesson and are not coming back for pieces of the cake….no matter how tempting it may be

its bad that msia is losing out to singapore. but be comforted that singapore is essentially malaysian anyway. most of their successful talent is malaysian sourced or origi’ned’. they are also smart enough to pull most of the malaysian talent anytime they can and will continue doing so for a long time to come. so dont be surprised singapore can compete with the world.

FTA is “pisau bermata dua”. If we closed our economy or say no to FTA, it will protect our uncompetitive industry like Proton, but at the same time industry with competitve advantage will face a setback in exporting their product. E.g. industry in our country that achieve world class (in fact some well known all over the world, albeit we are market leader) are FDI by MNC in “CKD” electronic/electrical and elecctrical items, computer component (Intel at Penang), Minyak Sawit, rubber, certain agri products, even our education attract a lot of students. If we close our economy for the sake of protect one dead wood and disregard one green mountain forest, then how say our palm oil compete with soya oil from US without FTA?

only time will tell. if vw buy proton the gov expect that it will be more competitve and later gov will dispose the protectionism. paklah mention about p1 have to be competitve unlike when tm is on the helm. imo, proton is a good asset for vw to buy, as a whole entity that is. singapore adore fta and globalization, there are a competitve lot who lives in a small but aging population. act, they need globalization. theres not much to do there.
msia should be compared to indon and thai rather than sing. if the gov loose this vw deal, and vw open up a factory in indon, i dont want to read that gm-p1 talk all over again .thats bull. just sell the company

Comments from LittleFire85 really excites me……..if all the manufactures go to thailand n indon due to the ketuanan melayu G, why does still a lot of indons are here to be buruh kontrak n the thais are here to cook tomyam n be a massager…..??? Why dont they just stay there and work with them in their homeland……..??? There’s a lot of opprtunities to be tapped……….

“at least mitsubishi learnt thier lesson and are not coming back for pieces of the cakeâ€¦.no matter how tempting it may be”

topgun, if you knew your motoring news, Mitsubishi went bankrupt a couple of years back, and mitsu bank had to bail them out. they are now only on the verge of recovering, do you think they are interested to come back to malaysia in the way you are saying?

Well, a lot of Malaysian also work in Singapore, US, UK, Arab Saudi… Why not say them? Those indo’s want to come to Malaysia is becoz our money value is higher then them and our law enforcement is louzy.. Each year how many illegal went in our country? I bet those indo’s on the road today only 50% are legal.. Look at Singapore.. U got guts to go in illegal? Anywayz i don’t see a lot of Thailand ppl come in Malaysia to work also… Only a few Cook, coz out Malaysia like to eat tom yam. And still their G appreciate their people who studied high and offer them a better job in bangkok.. Our G? Help ketuaan Melayu first, others second choice.. That why a lot of talent ppl went to SG, US, UK, Arab Saudi.. Even my neighbor son also go to Bangkok to work and come back with a Toyota Fortuner 3.0 D-4D & a pretty wife.. Damn i so envy about them!

Anywayz those indo’s, thailand & other foreign just come here to work, not open factory.. they are helping their pocket full with RM$$$ not helping our ppl earn money… :P If open factory at least for Malaysian who work inside still can earn money and learn something from them… If Toyota open factory in Malaysia like Toyota city in bangkok, don’t u think how many Malaysian will be invite inside to work? I don’t think their Gaji sucks? Their SA in UMW Malaysia can drive Vios and even Altis.. Huh.. That why some race mindset still not so broaden yet.. A lot of graduate will don’t have job.. If open those factory, don’t u think it will solve more our country problem? We still Tax them! Better study Economy!

Talk about Indon worker, Thai cook, expatirate, etc.in our country as well as otehr. From economic perspective, unemployment can be divided into the following: –

1. Structural unemployment – this taken place when those unemployed skills is not match the job available or don’t meet job market. For example, we have approximately 70,000 unemployed graduates yet there are few hundred thousand job opportunity in construction taken up by mainly Indon workers.

2. Geographical unemployment – means those unemployed are not necessary “mismatch of skills” as mention above. But due to geographical location. For example, there are IT job in Penang available, but some IT graduate still unemployed and looking for work in Klang Valley for reason best known to them.

The reasons for foreign worker in our country or our workers go to oversea is largly due to these two factors.\

In respect of FTA, actually our country embrace FTA in many sectors with the exception of “sentisitive areas” like government contract, auto sector and financial sector.

The benefits of FTA is definitely outweight the loss if the sector is competitve.
there is free flow of labour and FDI in open market that in 1980s and 90s, and until today, FDI in manufacturing sector become the engine of growth (wealth creation) in our economy.

In the case of auto sector, we are not competitve and that why this sector become “sensitive”. That why our government still do a balancing act to comply with FTA and at the same time take care of local interest. Among step taken is possible VW-Proton tie up. However, there is deadline to meet our FTA obligations and in the case of auto, it is 2010. For protective market, at most is reduce the outflow of the monies and circulation in our local economies (but not create “net wealth”).

I think it is the time for the G to reconsider the protective measures in ensuring the survival of P1. In the world of globalization, we dont really need to build a brand to represent Malaysia to the world. What we need is to train or give other to train our citizen (to be trained overseas) to achieve world-class skills. Do you think a driver in Europe who drive “Honda” will be admiring Japan or japanese because he drives “Honda” car? No!!! What about to the Japan G? They also not really concern as long as they get benefits from FOREX with the export of their cars. If we open our market for foreign company to setup factory in Malaysia, and subsequently export to other countries, i am sure government will benefit more than now in term of earning and also provided a better training ground for malaysia to enhance their skills. I would be proud if Malaysian named to be the top engineer, designer, CEO etc in any international company….then P! albility to penetrate EU market etc.. Just look at INTEL Malaysia where Malaysian able to design and market processor for global market..and many other malaysians with their success overseas… Just like our G recent campaign to concentrate on building human capital…better to spend Money in human capital than bail out non-viable company.. Again just look at our neighbour, Spore. For the last 40 years they concern about building Human capital, and till now the same strategy applied. Now they are aiming to export their citizen to other countries to provide more job opportunities. Can malaysian achieve the same with high number of graduates who are still unemployed?

if VW is not interested in proton, do you think they will waste their time to continue talks for so many months as a â€œDELAYING TACTICâ€? Whats the point to delay? delay what? What are you talking about??? VW can go and do anything thing they wish in any country at anytime they wantâ€¦ please comment intelligently la.

To me, i think our govt are too hasty in trying to sign FTAâ€™s with Japan, and also the US. as it stands already, we are greatly disadvantaged by trade deficits with these 2 countries. If we open our markets even further, I dont see where we will benefit? anyone else has an opinion on this?

indon got bird flu, earthquake, landslides, plane crash. but still vw prefer indon than bolehland. why? some of the gov policies need to go. for the good of the people (malay, chinese, indian, iban etc). for the good of all malaysians. for the good of the motoring industries.

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